How property tax assessments work
Q. Can you provide any insight on appealing a property tax assessment? My sister’s town just reassessed, and her property value has almost doubled. The assessor has overstated the value of the land. Of course, this is what I believe in comparison to my home situated on a similar road in Chatham. — Paying too much
A. The clock is ticking.
Your appeal must be filed by April 1 unless different date is specified by your county.
You’d file the appeal with the County Tax Board where the property is located, said Anthony Vignier, a certified financial planner and attorney with Vignier Investment Group in Kearny.
“In a case where the entire community has been re-assessed, the filing deadline is generally May 1 but one should always double check the deadlines by calling the local property tax office or County Tax Board,” Vignier said.
If a home is assessed for more than $1 million, you can bypass the County Tax Board and appeal directly to the New Jersey Tax Court, Vignier said, noting anyone taking that step should get an attorney to help.
If you decide to use an attorney, you’ll find there are quite a few who specialize in the area.They typically charge a percentage of your first year’s savings, said Ronald LeVine, a Hackensack-based attorney.
He said it’s important for you and your sister to move quickly because your chances are better in the year of the reassessment.
“Assessments in a reassessment year can be adjusted if the value as determined by the Board is any amount less, but in a non-assessment year, the owner must show that the over-assessment is at least 15 percent to win a reduction,” LeVine said. “In other words, this year, if she were overcharged by 10 percent, the Board would reduce it by the 10 percent, but in future years, she would get nothing.”
Vignier said the gist of a property tax appeal is to establish that your assessment exceeds the town’s average ratio by 15 percent.
“The way you prove your case is by submitting proofs regarding recent properties that have been sold — comparable sales, or `comps’ — in your town that are like your property but have lower taxes,” he said. “You need three to five comps. Short sales and foreclosures don’t count.”
One way you can get your comps is from a market analysis from a real estate agent, he said. Real estate agents may generate one for free if you have a relationship with them, he said.
“A market analysis however is technically not admissible as evidence. The best proof is an appraisal,” Vignier said. “An appraisal will set you back several hundred dollars.”
Vignier said once you have your comps, you can calculate the market value of your home and determine whether your property is over or under assessed. The steps for this calculation are stated in the appeal documents.
“Doing this calculation is important because if your assessment is correct, you’ll be wasting your time filing the appeal and if you’re under-assessed and file the appeal, the tax assessor can use your own evidence against you and raise your taxes,” Vignier said.
Copies of the appraisal report must be submitted at least seven days before the hearing, he said, and the appraiser must attend the hearing because only he can testify as to the appraisal report.
Vignier said at the hearing, you can present your case. The hearing can be very short so you must be prepared and get to the point.
Be aware that the success rate of appealing an assessment at the county level is very small.
“If you don’t agree with the decision, the next step is filing an appeal to the New Jersey Tax Court,” he said. “The filing deadline is forty-five days from the day when the Tax Board mailed its decision. You’ll need to hire a lawyer to represent you if you plan to file the appeal to the Tax Court.”
Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter.